Samsung Electronics and SK Hynix stocks experienced sharp declines in the previous trading session, with Samsung falling 6.48% to close at 252,500 won and SK Hynix dropping 6.67% to 1,791,000 won, according to Korea Exchange data. The decline was driven by large-scale foreign investor selling, with 1.7568 trillion won sold in Samsung and 873.1 billion won in SK Hynix, ending a four-day buying streak. The sell-off reflected concerns over NAND flash average selling price slowdown warnings, US high-voltage transmission line issues, and rising oil prices and interest rates dampening investor sentiment despite positive earnings from US tech giant Alphabet (Google).
Analysts Maintain High Target Prices Amid Correction
Major securities firms and Wall Street institutions view the correction as a short-term negative absorption process rather than fundamental deterioration. Kim Young-gun, a researcher at Mirae Asset Securities, stated that concerns about NAND price declines next year have been largely priced into the recent stock adjustment, and future supply expansion will not reach serious excess levels, recommending increased positions at current lows. Kang Da-hyun, a KB Securities researcher, projected that as DRAM production lines are concentrated on high bandwidth memory (HBM), general-purpose DRAM supply will tighten in a virtuous cycle. KB Securities maintained a target price of 600,000 won for Samsung Electronics, citing the company as a major beneficiary of Google's AI ecosystem, and kept SK Hynix's target at 4,200,000 won based on its B2B-focused sales structure transformation. Overseas investment banks including Evercore and Morgan Stanley also issued opinions characterizing current levels as attractive buying entry points.
Cautious View Recommends Waiting Until Q3
A contrasting cautious perspective suggests observation is needed until the third quarter rather than pursuing short-term rebounds. Moon Nam-joong, head of Daishin Securities' global strategy team, pointed out that strong past earnings performance has been largely priced into shares, and steep price increases are difficult amid oil and inflation pressures, identifying the fourth quarter and the US August Personal Consumption Expenditures (PCE) indicator release timing as important inflection points. Heo Jae-hwan, managing director at Eugene Investment & Securities, noted that while KOSPI has undergone price adjustment with a decline of nearly 30% from its peak, variables including tariffs and oil prices remain in July-August, advising a gradual response while confirming the downtrend has stopped.
FAQ
Why did Samsung Electronics and SK Hynix stocks fall sharply?
The stocks declined due to large-scale foreign investor selling totaling 1.7568 trillion won for Samsung and 873.1 billion won for SK Hynix, combined with concerns over NAND flash price slowdown warnings, US infrastructure issues, and rising oil prices and interest rates.
What are analysts' target prices for Samsung and SK Hynix?
KB Securities maintains a target price of 600,000 won for Samsung Electronics and 4,200,000 won for SK Hynix. Mirae Asset Securities and overseas institutions including Evercore and Morgan Stanley view current levels as attractive buying opportunities.
When do cautious analysts expect market conditions to improve?
Cautious analysts suggest waiting until the third quarter, with Moon Nam-joong of Daishin Securities identifying the fourth quarter and the US August PCE indicator release as important inflection points for market direction.
